China’s exports rose at the fastest pace in seven months in July, while imports declined, painting a mixed picture for the economy.
(Bloomberg) -- The Trump administration’s move to ban U.S. residents from doing business with Tencent Holdings Ltd.’s WeChat app rippled through Chinese markets, erasing $34.6 billion from the Internet giant’s market value and sending the yuan to its biggest slump in two weeks.The U.S. president’s executive order added to investor concern that the deteriorating U.S.-China relationship will weigh on companies, economies and markets. Initial confusion over the ban’s scope led to volatile trading on Friday, with Tencent plunging more than 10% during the morning session in Hong Kong. The stock pared losses to close down 5% after a U.S. official clarified the ban will only cover WeChat.The vaguely worded order had triggered fears it would apply not only to Tencent’s messaging and payments services in the U.S. but also to business relationships with some of America’s largest corporations. Tencent, ranked by Newzoo as the world’s biggest games publisher by revenue in 2019, collaborates with U.S. industry leaders like Activision Blizzard Inc. and Electronics Arts Inc. It also holds a large stake in Fortnite maker Epic Games Inc. and owns League of Legends developer Riot Games Inc.Before Friday’s drop Tencent was worth $686 billion, making it the world’s eighth-largest company by market capitalization and bigger than Berkshire Hathaway Inc. Its huge size means it occupies a dominant position on global indexes. The firm accounts for more than 6% of MSCI Inc.’s developing nation gauge and 4% of its Asian Pacific measure.Hong Kong’s Hang Seng Index slumped 1.6% on Friday, while the offshore yuan weakened as much as 0.45%.Trump’s order on WeChat came after a similar injunction against ByteDance Ltd.’s TikTok, the viral video service the White House accuses of jeopardizing national security. Tencent, whose app sits at the heart of communications between people and businesses within China and abroad, is likely to face continued pressure from American policy makers, said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd.“The U.S. government is expected to follow up with more measures targeting Tencent,” Leung said. “Tencent’s overseas expansion map now looks a bit uncertain, since some M&A deals, especially if its targets are based in the U.S., will face challenges.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The S&P 500 Index posted a fourth straight advance amid encouraging news on the vaccine front and speculation U.S. lawmakers are making progress on an economic aid package.The benchmark stock gauge rose to within 2% of its record closing high of 3,386, and a measure of global equities was near wiping out its losses for the year. Payment processor Square Inc. and media titan Walt Disney Co. rose after better-than-forecast earnings. Novavax Inc. jumped on positive early data from its experimental vaccine for Covid-19.Gold continued its ascent above a record $2,000 an ounce as investors sought an alternative to low bond yields. The dollar fell. Ten-year Treasury yields edged up. Oil rose after a decline in U.S. stockpiles.Investors have been pushing stocks higher in recent days as pressure grows on Republicans and Democrats to resolve differences over a new U.S. virus relief package, especially with jobs data Wednesday painting a grim picture. Gains in precious metals suggest traders are nervous about the outlook for the global economy and seeking a hedge.“Stock markets in general have been underpinned by expectations for further stimulus out of the U.S.,” said Candice Bangsund, portfolio manager of global asset allocation at Fiera Capital Corp. “The second-quarter earnings season has also lent some notable support and helped to counteract some of the fears about the latest resurgence in Covid cases.”U.S. economic data was mixed, with payroll gains slowing sharply in July, suggesting the pickup in coronavirus cases is putting the brakes on the job market. Meanwhile, service industries expanded in July at the fastest pace since February 2019.Elsewhere, the Stoxx Europe 600 Index advanced while Asian shares were mixed.Here are some key events coming up:Reserve Bank of India and Bank of England rate decisions due Thursday.Dallas Fed President Robert Kaplan discusses the U.S. economy at Thursday event.July U.S. employment and jobs reports expected Friday.These are some of the main moves in markets:StocksThe S&P 500 Index advanced 0.6% as of 4 p.m. New York time.The Stoxx Europe 600 Index gained 0.5%.The MSCI Asia Pacific Index climbed 0.7%.The MSCI Emerging Market Index advanced 1.2%.CurrenciesThe Bloomberg Dollar Spot Index declined 0.5%.The euro increased 0.5% to $1.1864.The Japanese yen rose 0.1% to 105.59 per dollar.BondsThe yield on 10-year Treasuries added four basis points to 0.54%.Germany’s 10-year yield increased five basis points to -0.51%.Britain’s 10-year yield climbed five basis points to 0.13%.CommoditiesWest Texas Intermediate crude added 1.1% to $42.16 a barrel.Gold strengthened 1.1% to $2,040.59 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.